Mobile application development of an alternative credit scoring system at a fintech company to improve personal financial planning

• Main Author: Chang, Je See
• Format: Final Year Project / Dissertation / Thesis
• Published: 2022
• Subjects: T Technology (General)
• Online Access: http://eprints.utar.edu.my/4732/1/fyp_IB_2022_CJS.pdf; http://eprints.utar.edu.my/4732/

In recent years, the size of populations using smartphones are increasing rapidly. It is because technology brings convenience and ease to the lifestyle. This brings more convenience to people's lives, which in turn increases the customer experience of the services provided by smartphones, especially credit scoring systems that are related to financial services. Credit scoring is a statistical analysis performed by financial institutions and lending institutions to assess a person's creditworthiness to decide whether to extend or deny credit. There are still several groups of population that do not access to essential banking services due to them not having a savings or checking account. Thus, alternative credit scoring comes to them as a solution to this problem. Alternative credit scoring refers to use of alternative or non-traditional financial data to determine credit worthiness such as mobile money usage, utility payment, e-commerce platform usage and so on. This project aims to develop an alternative credit scoring system that could help the country’s unbanked and underbanked populations improve their financial conditions. The project aims to solve the problems to let people have credit history with financial institutions to obtain loans and to solve the problems of lenders who do not have the information to effectively identify and determine the borrower’s character and credit worthiness. The project also encourages and enable unbanked and underbanked Malaysians to use alternative credit scoring systems, and solve the loan approval process in an easy way for SMEs. Using an alternative credit scoring mobile application will let Malaysians to receive better financial services as compared to the physical bank branch. Using mobile apps will be more convenient, cheaper and save time because there will be no need to spending time to queue up, to fill out forms and wait for banks to approve financial products. Besides, alternative data has the potential to help expand the responsibilities of credit access for those people who lack traditional credit scores. Alternative data such as rental payments, mobile phone payments, cable TV payments, banks account information such as withdrawals, deposits, transfers and so on, can be used to determine credit worthiness. Therefore, unbanked and underbanked people can have access to the loans they need to improve their lives, without facing many difficulties with the rules and barriers from the banks, especially in this COVID-19. Lastly, the project is expected to help unbanked and underbanked populations to improve their financial conditions, and let everyone has opportunity to be involved and contribute to their pursuit for a better live for themselves and their families.